If you have car insurance, you’re probably already familiar with the term ‘excess’, but how does car insurance excess work? We have all the answers in this easy-to-understand car insurance guide.
When it comes to your car insurance policy, it’s normal to have some questions about what certain terms mean. The legal lingo in your contract can be overwhelming and a little complicated, to say the least. At Oneplan, we do our best to make insurance simple and hassle-free. We get that life is complicated which is why we make sure our insurance isn’t.
What does excess mean in car insurance?
An excess is the amount of money you have to pay in when you submit a car insurance claim. If your claim is approved for R50 000 and your excess is R10 000, your insurance company will cover R40 000. You will be responsible for paying the remaining amount. If your excess if R5 000 and the cost of damage amounts to R5 000, then you will need to pay this full amount.
That’s why it’s not always logical to submit a claim for minor scratches and dents, but instead pay for them yourself.
Why does my vehicle insurer charge me an excess?
Your excess helps your insurer keep your monthly premium at an affordable rate. If insurance contracts didn’t have an excess, insurers would have to handle many small claims, leading to higher premiums.
An excess helps to lower your insurer’s costs of administration because, with an excess, clients will not claim for every small scratch or minor damage done to their car. Can you imagine the number of claims insurers would have to deal with if every single small scratch and dent was claimed for?
An excess gives you an incentive to look after and take care of your car because you know you have to pay in an amount of money in the event of an accident. Excesses discourage clients from filing a large number of claims that would also negatively affect their history of claims. The more you claim, the more of a risk you are to insure.
Always read the fine print of your policy and know exactly what your excess is
A number of customers fall prey to signing a vehicle insurance contract based on price alone. Meaning they believe that cheaper is better when it comes to car insurance. The truth is, the cheaper your premium, the less cover you have (meaning your excess is probably higher).
Most car insurance companies will give you a basic outline of what you are covered for and what your excess is. You need to make sure you read the fine print of your policy because some insurers will charge an extra excess if any of the following events are true for your claim:
- The driver was younger than 25.
- The accident occurred late at night or in the early hours of the morning.
- You were involved in an accident during the first 6 months of your policy.
- The accident did not involve a third party.
- The driver at the time of the accident was not the regular driver.
Do I have to pay an excess if the accident was not my fault?
Did you know that as many as 70% of cars on our roads are not insured? This means that many drivers who cause accidents do not have the funds to pay for the repairs. Because of this, you still have to pay excess even if the accident was not your fault.
Why you need comprehensive car insurance
At Oneplan, no matter what your monthly premium costs every month, your cover is ALWAYS comprehensive. This means we cover your car for accidents, fire, theft, acts of God/nature, AND third-party cover. And the best part is that we don’t require a vehicle inspection for your cover to kick in – all you have to do is snap a few pics of your vehicle and upload them to the Oneplan App.
We also let you choose exactly how much cover you want, based on the price you can afford, with our easy-to-use cover slider. Cover ranges from 30% to 95% cover (e.g., if you choose to have 30% cover, then you will pay the other 70% of every claim; if you choose 95% cover, then you will only pay the remaining 5% of a claim).
Good to know: Oneplan Car Insurance is comprehensive only up to your cover limit (a limit is the maximum amount of money we will pay you for a claim) which is based on the percentage of cover you have selected.
The best part is that you can press pause on your cover and adjust it whenever you want. Click here to sign up for Oneplan Car Insurance today, or you can get in touch with our friendly support team who will be happy to answer any additional questions you may have.
Your Insurance Family,
Oneplan
